tv Fast Money CNBC May 14, 2013 5:00pm-6:01pm EDT
the manufacturing survey for two months this index has declined but is still positive showing a slowdown in manufacturing growth in the state of new york. expecting a flat to higher reading over last month. >> thanks to both of you. >> good job. thank you both for your thoughts on tomorrow's market. thank you for joining me as well today. it was a great pleasure. that is it for the "closing bell." >> "fast money" starts right now. . live from the nasdaq market site in new york city's time square, i'm melissa lee. disruptive behavior we're talking to the ceo of a cloud company that's changing the rules of the game for some of the biggest tech companies out there. how box is giving oracle amazon and ibm a run for the money. dan loeb is trying to shake things up in japan. will he succeed at sony and how you should trade it? and real returns, reits have been a hot trade for investors looking for yield. we're talking to the ceo of a
major retail landlord whose stock is up more than 70% in the past year. brian kelly, tim seymour, guy adami and mike khou. the s&p 500 another all-time high leading the way higher. the nasdaq at a 12-year high. so the question is today, how are you trading it? tim? >> no inflation is very good news. and if you look at what happens with the dollar quietly back at july levels. this means commodity prices are getting pushed down. we are making trades in places where low inflation is a boom on the macro. i've talked a lot about turkey. india which had 41-month lows is a great place to be playing. low inflation and strong consumption story. hdb, ibm, ttm, ways to play but again, people love to talk about china in a world where people are worried about china, india actually benefits. >> yeah last week tim hit on it. we talked about how you want to look at areas that haven't
participated in this the other places, some of the refiners today, you had oil down gasoline up that's very good for the refiners. look at valero tisoro. >> i don't want to say canaries in the coal mine -- >> great song by the police by the way. >> and pete najarian on that end last night -- the financials which went to a new high in today's session in caterpillar, which had struggled and finished the day in the red. >> actually caterpillar did struggle today as you pointed out. but the point is this the market continues to go higher because there's nothing to indicate it wants to slow down. it becomes that simple. obviously the comments this morning aided this a lot, i believe. but there's, again, i have not seen any reason to sell into this yet. there's going to be the day where that happens. with that said retailers have been a space we've talked about. my favorite in the space has been gap stores. comps came out, were very
positive. obviously the s&p at all-time high, i think it goes higher from here. >> it's funny you mention teper we were talking about how he when he goes on, he tends to move markets. you've got to wonder. >> i think he's very long. and i think he's made a great call. but there's a couple of bulls flanking the corner of this desk. and i'm curious why you suddenly feel like this market can go higher. >> no listen -- i've said -- i've said for a while, i'm still very -- in my overall view of things. it doesn't mean the market can't continue to go higher. that's, i think, where the disconnect is with people and that's why people are getting hurt. i think the warning signs are there. i think some of the internals speak to this. i think the jgb move speaks to this, but in the meantime, the s&p wants to go higher. >> it matters what the market is doing. and the market keeps going up. so i'm looking for areas that just haven't participated that could participate with
reasonable fundamentals behind it that they might take off. >> your thoughts on the market at this point? >> i don't really know what to make of it, actually. who knows why, but, you know, i still have that same feeling that i think so many other people have. well, i like my stuff and my stuff isn't overvalued but everything else is really starting to get frothy. so i know that when things turn my stuff, of course, is no matter how valuable i think it is will become less valuable. >> but your position is more net long than you have been? are you leaning into this rally? >> well one of the things getting us more net long the longs go up and as we've shifted with the vix lower in the last several months we've been shifting to puts. as the market goes up the decrease in value, and you become effectively longer. interestingly today, the vix was higher with the market higher. >> right. >> that's sort of an interesting -- >> i want to go to mike to get
intel on that. mike? >> yeah you know i think that is an interesting observation because as karen points out, generally speaking as the s&p rises, you would expect to see the vix drop. the reason is actually related to the fact that upside calls typically trade at a slight discount to the downside puts. and as you move up you're moving to the higher strikes where the calls are. you expect to see the volatility drop down. you do see this when people become concerned at the tops as well as the bottoms. i think right now, a lot of unbridled optimism and people are buying more insurance, thinking it looks cheap and feeling they want to protect gains. >> let's talk about the march higher because stocks have done nothing but gone higher for 178 days. without a 5% pullback for the bulls. so surely we're overdue for a drop in stocks. well, let's bring in the chief market strategist at lpl financial. jeff, good to see you. >> great to see you, thanks for having me on.
>> just because it hasn't happened doesn't mean it has to happen, does it? >> no that's right. but, you know this is -- you're right, 178 days now, takes the record for this 50-month-old bull market. you've got to go back to '06 or early '07 to see a rally this long. 11% of the 200-day moving average. you combine that with a market that i think is in conflict with itself. stocks in a bull market commodity in a bear. bonds with a zero return and i'd say this market's due for a consolidation here in the coming weeks. >> meaning back to the 200-day moving average. >> that's about -- usually when we see these types of runs 178 or more none of them have ended with a bear market. they've all ended looked at the '80s '90s 2000s those are the ones you want to buy. some cyclicals have seen a 5% to
10% pullback. >> jeff brian kelly, if we see a 1% down day for the person at home, do they wait for that? are we looking at that 5% 10%, do they wait and say i'm going to wait for it to be 5%, scale into it, what are you recommending? >> you know moving through these corrections are a process. i think you start buying them when you're down three. and when you're down seven, you pat yourself on the back and say i've got a good deal. >> thanks for your time. >> interesting point he makes in terms of a market being in contact with itself. how can a market be built on a rally in things like the defensive names, names that pay a high-dividend yield and also with commodities declining. >> buying commodities stocks to me when they're cheap is dangerous. you buy them when they're expensive. you chase them because you're buying into global growth. so i would be wary of that even though i do think emerging markets are oversold, for example. >> and to tim's point, i do
think a lot of this rally has been built on sand. but a house of cards you can build it extraordinarily high until it collapses. i've been leery of it but you've got to continue to go with the flow. >> house of cards built on sand. >> dangerous. >> i'm just asking. >> the fact that we staved off 1624 last week and rallied, i think 1,570 becomes the line in the sand in terms of support. >> we talked about david teper, reiterated his bullish market call on cnbc earlier today. he weighed in on individual stocks. take a listen to what he said specifically about apple. >> we still have a position in apple. we bought a little bit, you know, below 400, just a little bit. i along with everybody else waiting to hear what they have to say as far as do they have something revolutionary in the horizon? >> that sounded like a reluctant bull call to me.
>> sounds like he's dating. >> yeah, exactly. actually had the worst day in two weeks. take a look at the intraday chart, this really started happening just before 2:00 eastern time. you can see the stock drop there. it was about a 2% plus move from top to bottom there. there wasn't a good reason. traders were telling me it was a combination of things. 450 stops and also the fact there was this interview earlier in the day that started getting circulated on trading desks around that time saying that apples were $240 a share. >> yeah, that was the most substantial thing i saw out there. >> right. in quotes, by the way. >> it sparks some profit taking. but i do think what's interesting what david teper said and einhorn last week they're waiting for the next revolutionary product and investors have this assumption that apple's going to come out with another kind of phone. but what they learned from the
iphone 5 launch is they cannibalize sales. i would not be surprised to see apple come out with something nobody's expecting. >> did this trouble you, karen? >> yeah actually we were talking during the day today and i couldn't find any reason for it and then i look around at various websites and see some pretty stupid reasons, i mean ridiculous and then people calling for tim cook's head which i also think is ridiculous. i couldn't pinpoint it to anything? i don't know, i can't get worked up over it. >> had numbers out today out of taiwan and a lot of people pointed out slower orders from apple. this was news that apple had sold off -- >> it's overnight. >> and the numbers even about a month ago. i do think a lot of this was technical at 451. poem say it broke the neckline led to $8 drop in two minutes. there you go. >> also weighed in by the way, on financials, that's his biggest position. >> my biggest position,
citibank, we're still there. you'll see it when it comes out. still citibank. we have a certain amount of the you know u.s. banks which are good sectors. >> and the financials as you know led the market's gain today. citi finishing up more than 2.5% here. nice move, karen. >> yeah i like all three, the very big money centers, bank of america, citi, and jpmorgan. but citi i think, has the most upside here. >> a lot of people, we've talked about this a little while ago. some people think they can earn $8 to $10 million in the next year and a half. you're talking about a $64 to $70 stock. i own citi as well. i'm not as optimistic as that $8 to $10, but i think the stock can continue to rally here. why two of our traders are clashing over this tech giant as it gets ready to report earnings. and add real estate exposure to your portfolio, we'll get some answers, but first, the next run where hedge fund expert sees
activity ramping up as dan loeb targets japan. and just give them the basics, you know. i got this. [thinking] is it that time? the son picks up the check? [thinking] i'm still working. he's retired. i hope he's saving. i hope he saved enough. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. whether you're just starting your 401(k) or you are ready for retirement we'll help you get there.
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let's get to our call of the day. morgan stanley raising the price target for a stealth winner. test tesla is up. up from a $47 price target. so are they too late to -- well obviously they are too late to the party. thank you, morgan stanley for raising the rating here on tesla days later. >> it seems absurd. absolutely absurd. tesla is so disconnected from -- >> from reality, fundamentals -- >> from gravity or any kind of force in the universe. >> tremendous reversal today it's a massive range. and i wouldn't want to touch it. but if you're in it respect that reversal day today. >> what was interesting, also had a note out where they've got a $27 target and they say you have to go two to three times the sales estimates on the model to actually get to anywhere close where morgan stanley is. also morgan stanley does this
on dcf, and it's very different than an earnings related model. which means they can plug in assumptions and in this case, they have the average cost of capital. the more you drop that the higher up your price goes and there's a lot of ways to get the number. >> it was a 15-year dcf too. >> to me when the stock is 15% volatility on the way down after this announcement you have to be careful. activist investors rarely take on japan's conservative corporate culture. but promising structural reform is japan the new frontier for hedge funds? our next guest has a strategy based on big activist holdings. a 28% return since the inception in 2011. and, of course it's good to see you. >> thanks for having me back. >> we brought you on because of dan loeb's effort now to be an activist in shares of sony. 6.5% stake at this point and urging the company to spin out 20% of the entertainment business. the question here, can he actually be successful in this?
>> well it might be changing. and i think this is going to be a bell weather for a lot of other investors looking to come into japan. as you said the prime minister just announced a three-arrow plan to revive the economy. and one of those arrows is regulatory reform to stimulate outside investment. and there's nothing i could think of that could stimulate it more right now than for sony to welcome dan loeb on to their board. >> when is japan going to make these changes. you're talking about a place that still hasn't recovered from the 1990s. and from there, essentially the bad debt on their balance sheets. they've done nothing to show that they're ready to take on the problem and actually weed out where, you know, in the sense where a corporation is fat, where they have places to improve and restructure. >> i don't think it's going to be a quick process. dan loeb sees the sentiment, maybe changing the environment changing.
and it's going to be the precipice of something happening over many years. >> you wouldn't chase the stock today? >> i wouldn't -- there hasn't been a 13-day fraud, a lot of that is in swaps, he's less than 5% in common. so you know, it's -- he likes to -- he obviously likes the investment, but thinks it's a great investment if he can get his activism accomplished. >> what would warren say about activism? it's been -- i couldn't even follow it anymore, it was way too long and drawn out for me. >> warren has had some success in japan. he's had some situations that weren't successful. but it's very difficult. they have, you know, they have some good laws 3% of the shareholders can call a special meeting, but nothing's going to happen there because the sentiment is so against outside investors. now, you know dan this is not a contentious thing for dan. he's not coming in here to start a proxy fight. he's not trying to break up the company as many people have reported. he's saying i want to spin off
20% of the entertainment business to the shareholders much like the finance business already is. and he wants a board seat and being that he put $1 billion into the company. it could be a long-term investment for him. >> a lot of this seems to be predicated on a weakening yen which continues to weaken at an alarmingly quick pace. do you have a view on where dollar/yen's going. it's called 100 for sake of argument. are we sort of topping out? >> i don't really -- that's not to my expertise, i don't want to speak on that. but to your point is there is the trade out there where you're short the yen and long japan equities. and i think third point has announced they have -- they do have a short position in the yen. >> i would think that a weakening yen would be more on sony's side because it wouldn't push them to change. if it had not been for the weakening yen, their stock price would be in a much different place. >> i think it's in everybody's best interest for the stocks to go higher. my point is i think, the
backdrop of this all of this -- i don't think he'd be in this but for the fact that there's clearly -- clearly a policy in place to make the yen weak. >> there's backstop on his trade? and there's upside on that. >> the other side of this if you look at sony the entertainment part of the story there is doing phenomenally well. the electronics business all exporters off to the races. this is where dan loeb is pushing. this is where the company is very reluctant. as we've seen in the entire media sector this is a place where premium valuations. this is a sweet time. you're getting a valuation for a piece of that company that i think makes some sense. >> would you be a buyer of sony on the belief that there could be upside if there is value unlocked? >> yeah i think, actually this could be a strategy that we see quite a bit going forward. because, one, you have that tail wind of the weekend. sony doesn't have to do anything neither does a japanese company. but if you're an activist investor and you can start pushing these stocks around or
at least gassing them up a little bit by saying hey, i think this should happen, that protects your position in it. i think whether anything happens or not, i think you see an awful lot of these things coming down the road. >> thanks for coming by. all right. time now for pops and drops big movers of the day. we kick it off with valero. >> mentioned a the the top of the show all the refiners looked good today. gasoline up, oil down good for refiners. >> drop or pop, down 2% tim? >> chinese data industrial data down not good for copper. so copper fails miserably at 50-moving day and i think 355 is the level it'll have trouble getting through unless we see improvement. >> up 4% mike? >> well they got an upgrade from raymond james. and we saw lumber was down limit $10 to $3.27. this is a playen on the housing boom. if it pulls back maybe. >> bank of america up today, 2%
the move. >> banks good today. bank of america, very good. >> thanks, good. >> she grunts. pop for best buy up 5%. >> got to give kudos, we street fought this months ago. >> street fought. >> and here it is, $27. great job by him. >> there was a blood bath. >> huge move on light volume. seems to me like this can continue higher. i don't believe it but the stock wants to move higher here. >> tim, by the way, has been on a winning streak i believe. tim-tim. >> i'm not going to talk about the rangers winning last night either. >> you just did. drop for hip sisters. try not to spill your pbr or rip your skinny jeans in anger, a new poll finds americans just don't like hip sisters. the survey says that only 16% of americans have a favorable opinion of the young self-important crowd. and bad news for future hipster
politicians. >> i don't think there are republican hipsters. >> i'm a hipster, you're a hipster. >> i'm not young enough either. >> i'm obviously not very popular. >> can you define? i'm not trying to put you on the spot. >> skinny jeans. like a guy who would wear skinny jeans got like the glasses, he maybe has a little stubble on -- >> if the answer is no you're a hipster. >> you wear a wool cap. coming up next the sector tripling the broader market but first, he runs some of the nation's biggest shopping malls. why the real estate boom is just getting started. much more "fast" straight ahead.
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let's go to eamon javers with breaking news on the inspector general's report on the irs. >> well that inspector general's report is out now. my colleague john harwood printed this one out. it is hot off the presses and we're going through it right now. i've spoken with an official who is familiar with the contents of this report who gave me a rundown on what it is that we're seeing here. a couple of key points from the report that we should highlight here for you. the report asked were there inappropriate criteria used here by the irs to scrutinize conservative groups. the report concludes, i'm told by the official yes, there were inappropriate criteria. another question were there inappropriate delays in approving the tax status of some of these conservative groups.
and finally, were the irs folks asking inappropriate questions about these conservative groups? and i'm told on that question as well, the report concludes, yes, they were asking inappropriate questions of the conservative groups. another couple of points here in compiling this report they didn't talk to the irs commissioner or the treasury secretary. they felt that was beyond the purview of what the report required. those two individuals were not interviewed here. the questionable policies here were involved individuals in washington and other areas around the country not just in that cincinnati office. so i'm told by an official here the questionable policies involved individuals making decisions in washington and around the rest of the country, as well, and we'll be going through the rest of this report to figure out exactly what else the tax administration has put out here. but obviously, this has been the story that's been dominating over the past couple of days and we have a whole lot of new reading material to figure out
what went on here melissa. >> thanks so much. moving on here real money to be made in real estate and one of the hot education trades this year has been reits. diana olick here to break down the new report. >> that's right, melissa. even as the stock market soars into record territory, real estate investment trusts are shooting past it. u.s. reit returns were more than three times those of the broader equity markets in april according to a new report the industry's association. take a look at the index. up nearly 6% in april while the all-equity read index over 6%. s&p 500 just below 2%. year-to-date, both reit indexes are up around 14% while the s&p was up 12%. it's all about bernanke that according to sandler o'neal. he says investors are scrambling for return and pushing up prices on other assets. reits offer earnings and dividend growth as well as inflation protection he says.
reits have to distribute at least 90% of income to shareholders in the form of dividends. okay who's outshining the pack? health care was the industry's top performer with a nearly 24% total return lodging also up around 17% as is retail. yep, consumers are beginning to travel and spend at the malls again. and another beneficiary of the housing recovery mortgage and housing finance reits. apartment buildings is driving a lot of that. but surprisingly apartment reits are underperforming their peers despite strong rental demand and low vacancies. analysts say theyat may be a mistake on the part of investors who think it is rebounding far faster than it is. worried there's too much multi-family construction coming online. there's plenty of course online realty check.cnbc,.com. >> let's bring in one of the
largest landlords in the country, the company went public about a year ago. up 78% since then. the ceo of retail properties of america. steve, great to have you with us. >> thanks for having me. >> we had a guest on yesterday who basically said that there is such a search for yield these days on the part of investors it's creating some bubbles in areas that are high yielding such as reits and named reits specifically. did you recognize that investors are flocking to your sector because of the yield you pay? >> absolutely. when we look at where we are. we're in a balance of providing a nice dividend to our shareholders but obviously looking for the longer term and the total return we ultimately will achieve. i think dividends is definitely a big play. when you look at the make-up of our shareholder base we are largely retailed based. there's a lot of institutions that would like to have that total return. but it's a good balance to have. one of which is more yield based
as opposed to total return base. >> with such a heavy retail investment in your stock, are you concerned about an eventual or -- i don't want to say eventual meaning that's going to happen but are you concerned there will be a rotation as this market goes higher out of these high-yielding stocks and into some of the more leveraged sectors to the economy? like technology? >> well our investor has been very tried and true to our particular company looking for that dividend yield over some period of time. we actually launched a program whereby we were phasing in the liquidity of our retail share base at the time of our ipo. and what we did was an 18-month phased in liquidity for our shareholders where 25% of the initial shares were unlocking day one. and each six-month period in an additional 25%. we have not seen a lot of movement out of that share base. and i think that we feel that people are believers of real estate again especially with you know the spike in home
prices that you're seeing right now. and just the overall health and the retail community. i think people are believers again in real estate specifically retail real estate. >> let me ask you this weighing this hunt for yield that you've been the beneficiary of what is the ideal inflation scenario for you? for your business but weighing also your -- how you are as a -- >> the retailers do benefit from some level of inflation and i think we've been inflation starved for quite some time. i think they're looking for a little bit of inflation. call it a couple of percent, things of that nature only helps in this particular economy to grow that top line. as we all know the retailers are managing to the margin now which we're happy to hear about because margin's what pays the rent. we feel very good about retailers being focused on that top line, but margins, as well. it translates to the retail landlord, as well. >> you reported first quarter last week i think, it's 17
times forward earnings. what can i take away from that first quarter to make me optimistic about the stock? >> i think the first quarter was -- all reits were doing very well. i think when you look at the same store numbers we're looking pretty strong for the sector. in particular we have an occupancy upside that i think is a little bit better than some of the peers and not to compare us to the peers specifically on the show here, but we feel as though we have an opportunity particularly as a result of our better than 10,000 square feet of space is now 97% leased and the smaller space is seeing the traction in that bigger you know occupancy percentage or rate with the bigger better than 10,000 square feet of space, so we're getting a lot more traction. so we have a bit more upside in our particular occupancy with the smaller shop space and that's the one that pays the higher rent and should translate into a very strong you know distributable cash over time. >> steve, thanks fur your time. hope to see you again. coming up next the upstarts
transforming the way we work and disrupting tech giants like microsoft and oracle. which software companies made cnbc's exclusive new disrupter 50 list. squaring off one of the largest tech companies in the world. why they don't agree on the feature, back after this. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine.
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welcome back to "fast money," we are live at the market site in time square. cisco, which reports earnings in just about 24 hours up more than 27% over the past 52 weeks. is the company a value play or a value trap? answers to this in our street fight. guy is the bear. total of 90 seconds to make both cases. beaks, kick it off. >> it's unusual for me to start off here in the bull. i'm going to make it simple. i probably don't need that time. ivy, internet traffic, that's number one. it is expected to be up 13 times in the next four years. a little fun fact is by the end of this year there'll be more mobile phones and more smartphones on the planet than there are people. number two valuation trading about two times book. cisco traded at 2.34 times book with fewer revenues.
if you take that valuation and guess four times book you're looking at $24. about a 14% upside. and then finally, yield, woo ef been talking about it all show. 3% yield on this stock. i don't see how you can go wrong, looks like a bargain to me. >> great points by b.k. point number one absolutely true, but you better hope that cisco dominates that space or it's somewhat meaningless to them. look at the last quarter, it wasn't particularly great. then you go and look at the trend in the stock. since the late 2007 when it topped out at 33 it's been in a very well-defined down trend marked by spikes along the way in the midst of now, i think it's going to be another opportunity to see the stock and going to see that after they report. and i believe this deteriorating macro environment which i believe we're right smack in the midst of is going to weigh on the gross margins.
and i believe that margins are everything to the cisco quarters going forward. >> all right. >> well, there we go. >> pretty good cases being made. >> tim seymour, bull or bear? >> brian used more time than guy, just pointing that out. but i think the third and fourth quarter guidance is more than baked in and out there for the market. and i think, you know you have to stay overweight this stock, 3.5% dividend yield, valuation. i liked this this is not a stock, even though it's done well kept pace with the s&p, valuation and understanding of where the business model is challenged is well in this stock price. >> karen, bull or bear on cisco? >> totally agree, love what tim was saying. valuation $30 billion net cash on the balance sheet, ten times -- couldn't bet against that. >> does that mean i lose again? >> looks that way. >> we're going to go to the audience because we always like to know what people out there, our audience thinks who won the street fight. tweet us #bull for beaks,
beaks, #bear. after unveiling the new q-5 smartphone targeting more youthful demographic, but despite that the smartphone maker closing the week on a high note. what did you see? >> i think they might have been speculating they might get a little bit of a bump out of the stock rather than racing and buying new shares they were buying the may 15 calls. the stock continued to drift lower as the day went on and those things closed out the day in this mid-20s. if one was inclined to make a bet, it's a cheap way to hope the stock is up about 1575 or so at the end of the week. coming up next the list of companies shaking up their sector's roles right here on "fast money." revealed today the software companies disrupting the marketplace. one of them even helped track down osama bin laden. stay tuned.
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all right. more of our cnbc disrupter. our exclusive list of companies taking on the established market leaders. rolling out the list all this week on "fast money" and julia boorstin live here at the nasdaq market site. what do you for us today? >> well this is a software sector. these companies run the infrastructure of businesses. they streamline operations and keep data secure. the sector's long been dominated by deep-pocketed giants. but this past quarter, both ibm and oracle missed expectations as disrupters pick off pieces of the $300 million software market. >> these five cnbc disrupters are making powerful software cheaper and accessible to companies of all sizes transforming how we work. allowing groups to collaborate and track projects anywhere any time. with over 22,000 customers, it's
been profitable for 44 consecutive quarters. biting into ibm, oracle and s&p's market share. also tapping into the power of the cloud, box and drop box offer access to cloud storage, basic service is free, subscriptions include more storage and additional tools. drop box focuses on individuals with 100 million users saving nearly 1 billion files daily. offering secure, collaborative solutions. it poses a growing threat to the likes of microsoft, amazon web services and hp. manages big data looking for patterns to help companies and government agencies fight fraud and eliminate waste even helping the pentagon target osama bin laden. and with cyber attacks rising, so has demand for security software. bromium takes a new approach by isolating cyber attacks. founded two years ago, it's already generating close to $10
million in revenue. >> and with us right now is the co-founder and ceo of box. aaron, thanks so much for joining us today. >> sure thank you. >> aaron, first i have to say, you're estimated to be worth about $3 billion, the company's worth that $3 billion. when are you going to go public? >> we are certainly on a path to building a long-term, independent sustainable company and obviously going public is a part of that. i'd say that you know, maybe don't expect it this year, but soon thereafter i think it's something we're taking very seriously. >> and who's your biggest competition? >> well so most of the traditional spend in storage and collaboration and content management software goes into companies like emc or microsoft or oracle and ibm. so most of the dollars and budget today are going to those legacy players. but the disruption of course is new solutions entering the enterprise making those
solutions perhaps less relevant. providing more value and productivity to these organizations. so we kind of compete with a pretty broad landscape, but we do so in a unique way. >> aaron, at the end of the day though, isn't cloud storage a commodity business in which margins are razor thin and it's a lot on price? >> that's a great question. consumer space it absolutely is. if you're a consumer you're looking for the cheapest and easiest way to complete a task. and that part of the market with apple and google and micromicrosoft, i think the cost will go down to zero for consumers. in the enterprise base generally care more about security, platform collaboration, the scaleability of the system and we believe that enterprises generally pay for that kind of value. that's the part of the market we're focused on. we serve 150,000 businesses that use the product. and so it's absolutely a very different kind of business model than in the consumer side of the market. >> well aaron levy thanks so
much for joining us we look forward to seeing who you disrupt next. you can continue to follow the series at cnbc disrupters for the latest updates, cnbc disrupters and check out disrupter50.cnbc.com to find out the companies that make the list as we continue to roll them out this week. starting tomorrow the financial services firms giving traditional players a run for their money and tomorrow i'll be right back here on "fast money" with transportation companies that are changing the game. >> now there are a lot of competitors in this and the reason i asked about commodity business, we've heard more and more about price drops. at the end of the day, again -- a lot of it's -- that's for you out there. >> the name that comes to mind for me is crm. everybody trying to shoot against this on the short end. obviously the broader market has hurt them. but the stock itself has done rather well. they report on the 23rd it'll be interesting to see what happens there. i could see another one of these crazy spikes higher.
>> salesforce, you could attribute to some of their success to some of the weakness we saw in oracle in the last quarter. i look at s.a.p. over in germany, they just launched the platform which ultimately is erp, crm, at least their attempt to bring this to the cloud. i think size matters when you get these big boys. they will probably be buyers of box or i would not speculate that's happening. i'm just saying, i think consolidation happens and the other guys will do it. >> salesforce has invested in box. they're allied and partnered. will salesforce end up buying someone like them? >> once they follow registration statement, if they consider going public that would be a time around then that somebody like a salesforce would think hard about buying. >> yeah. and i actually think you look at google, as well. their google drive is great. but i've been a big cruiser of dropbox. i'm not sure that drop box necessarily will make google
stock go down but along those lines, it could be a good acquisition. >> great to see you. see you tomorrow. the viewer tweets making today's "fast money" cut. we're trading them live on the other side of this break. [ driver ] today, my ambulance knew all about a bike accident just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before. ♪ ♪ [ laughter ] ♪ ♪ [ female
announcer ] each one of us is our own boss. ♪ ♪ and no matter where you are in life ask your financial professional how lincoln financial can help you take charge of your future. ♪ ♪ ♪ ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ]
welcome back to "fast money," i'm josh lipton. some headlines crossing here on google. dow jones is reporting that google is set to launch a spodify music streaming service could launch as soon as this week. google has signed deals with three major music labels. you're looking at after hours moving. google not doing much but pandora down 2% here in the after hours. back to you. >> thank you very much. you tweeted, we traded. let's get some of your tweets to our crew today. the first one is for tim the hipster. will you talk about chinese internet stocks like baidu? >> well quickly, i think these are trades not marriages, these are dates, not marriages. >> you love that segment, because every single stock is now in that context. within that frame.
>> i think of my life that way. >> oh that's going to work well tonight at home with your pregnant wife. nice. >> can we talk about chinese internet stocks please? this is a stock with a nice rally and ran into resistance. probably the one with the most interest because i think they have the most interesting business model. they are the closest -- >> marry sina. >> i would marry sina before i marry baidu. >> are we playing that? >> i got dragged into the conversation. >> this one's for karen. would you put money in nordstrom? >> it's a great company and they have decent growth but for the valuation dollar for dollar i would much rather be in macy's. and macy's reports tomorrow after close, i think. so for me. >> what is your take on the japanese bond market? seems like a bad omen. >> we've had yields up about
94%, 95% in the last six weeks. this is a massive, massive move. it's still not a concern where you worried about japan turning into greece, but it's the pace and how swiftly it's happened. if this continues, then you're going to have a problem and then you want to be out of your nikkei. so watch the nikkei on this. if you get weak nikkei and weak bond market, that's your problem. >> this freaked you out and you don't normally follow the market. that's not your cup of tea necessarily, but this was on your radar. >> the interest rates are still below 1% but the move has been unbelievable. sort of unprecedented moves. things don't move they shouldn't move that quickly. it's a little scary, yes. >> who won the street based on your tweets. we've also got your first move tomorrow. stay tuned.
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sacrifice to the bull gods. >> mastercard has been a monster. i think it'll continue to be one. >> i'm melissa lee, follow me on twitter @melissalee. "mad money" with jim cramer starts right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you a little money. my job is not just to entertain you but to educate and teach so call me 1-800-743-cnbc. big themes. big themes work for any occasion. i usually reserve talking about them for when the market is down! and down hard!